Pelosi Makes Case for Government-Run Health Option

By Erica Werner | October 15, 2009 | 5:09 PM EDT

House Speaker Nancy Pelosi of Calif. gestures during her weekly news conference on Capitol Hill in Washington, Thursday, Oct. 15, 2009. (AP Photo/Harry Hamburg)

Washington (AP) - House Speaker Nancy Pelosi said Thursday that the case is growing stronger for allowing the government to sell health insurance in competition with private companies, contending recent attacks from the industry should dispel any doubts.
"The need for a public option is very clear," the California Democrat told reporters at her weekly news conference, making the argument as lawmakers on both sides of the Capitol worked to finalize sweeping legislation extending coverage to millions of the uninsured.
Whether the Senate bill will include a public plan in any form is a major question mark, but "our House bill will have a public option," the California Democrat declared.
"Anyone who had any doubts about the need for such an option need only look at the behavior of the health insurance industry this week," Pelosi said. "The idea that we would have health insurance reform without a public option becomes less likely."
She was referring to an industry-funded study that said insurance premiums would rise under health overhaul legislation advanced by the Senate Finance Committee earlier this week. Pelosi also referenced an insurance industry ad campaign targeted at seniors.
The speaker has been on the attack against health insurers for months, but the latest developments clearly strengthened her resolve to make them pay. She also said the House was now considering adding to its health care bill a $6.7 billion-a-year fee on insurance companies that is part of the Senate Finance package.
"There are some things we'd like to see happen to the insurance companies that they might not like," Pelosi said.
It's been clear for some time that the House health overhaul bill would likely include a public plan, but its design remains unsettled. However, the stronger version favored by liberals - one that would use reimbursement rates to providers based on Medicare rates - may be gaining favor.
Pelosi supports that version though she said a final decision hadn't been made. She said that if people are going to be required to purchase health insurance - as all the health bills on Capitol Hill contemplate - they need to have access to the cheaper rates government insurance could offer.
"If you are going to mandate that people must buy insurance, why would you throw them into the lion's den of the insurance industry without some leverage with a public option?" she asked.
In the Senate, Majority Leader Harry Reid is weighing whether to include some version of a public plan as he works to merge the Finance bill with a more liberal version approved by the Health, Education, Labor and Pensions Committee.
Because of opposition from moderate Senate Democrats, any public plan Reid does include would likely be some type of compromise, such as leaving the decision on a public plan to states, or offering public coverage only as a backstop in areas where one insurer has a lock on the market - the approach favored by moderate Sen. Olympia Snowe, who has considerable leverage as the lone GOP vote in favor of the health care bill in the Finance Committee.
Reid met Thursday with key committee chairmen, White House Chief of Staff Rahm Emanuel and other officials wrestling to finalize a bill that could get the 60 votes needed to advance in the 100-seat Senate. Reid later held out hope of getting support from more Republicans than just Snowe.
"We're not writing off the Republicans," Reid said. Snowe's fellow Maine Republican, Susan Collins, has indicated an openness to potentially supporting a bill though she has said major changes would be needed from what the Finance Committee passed.
Pelosi didn't rule out or in supporting a compromise public plan but said that when the House and Senate meet for negotiations on their respective health care bills, she wants the House to have passed the strongest public plan version possible.
"I want to send our conferees to the table with the most muscle for America's middle class," she said.
A spokesman for an industry group, America's Health Insurance Plans, said in response to Pelosi's comments that "the American people want policy makers to pursue reforms that are in the best interest of the country, not as retaliation for speaking out about rising health care costs."
Spokesman Robert Zirkelbach also reiterated concerns about the government option, which the insurance industry and other business groups contend could drive private insurers out of business because they wouldn't be able to compete with the weight of the federal government.
"Any time an entity can be both a player on the field and the referee there can't be fair competition," Zirkelbach said.
Democratic leaders in the House and Senate are aiming to finalize their bills in time to begin floor debate in each chamber within weeks, though likely not this month. Obama wants to sign a bill this year. Overall, the legislation would carry a price tag around $900 billion over 10 years, require most people for the first time to purchase insurance, provide subsidies to help lower-income people do so, and put new requirements on insurance companies to prevent them from charging much more to older people or denying coverage to people with pre-existing conditions.
Obama will aim to rally support for the overall effort next Tuesday by appearing in a live Web cast to be shown at house parties organized by his backers.
House Speaker Nancy Pelosi said Thursday that the case is growing stronger for allowing the government to sell health insurance in competition with private companies, contending recent attacks from the industry should dispel any doubts.